An optical integrated circuit (IC) is a compactly packaged electronic circuit, chip, or microchip that processes light directly to perform various communication functions. The advantages in using an optical integrated circuit include the higher maximum data speed that can be sent over an optical link as compared to other means and the freedom from damage due to natural and man-made interference and transient energies. These energies include electromagnetic emissions and electrostatic discharge from clouds observed as lightning and seen as electromagnetic pulse (EMP) by electrical and electronic circuits.

The optical integrated circuit uses various types of electronics components such as semiconductors that act as optical sources, optical modulators, and optical detectors. The intensity of light from an optical source can be controlled to carry the message to the far end of an optical cable. In order to carry an analog signal, the intensity of light being sent can be varied in proportion to the instantaneous level of the analog signal. For instance, in radio coverage extenders that make radio signals available in confined spaces such as several basement levels below ground level, a radio system can provide an optical version of the radio signals that can be sent to several kilometers via an optical cable.

Systems that support communications via cell phones use various digital broadband communications equipment, which may be wire, wireless, or fiber based. The optical integrated circuit is usually used for fiber-based communications that make use of either single-mode or multi-mode fibers. Instead of a single optical signal, multi-mode fibers use two or more optical signals on the same optical fiber. Optical fibers are actually made up of a slightly flexible glass material that allows light to pass through with very little loss. This characteristic makes optical fiber communications ideal for long spans of cable, in many controlled locations.

The optical integrated circuit is used for data communications equipment for computers and other digital devices. For data rates up to a few hundred million bits per second (mbps), wire and wireless means of communications may be practical, but for higher speeds communication between nodes is more practical with high-speed optical data communications. For instance, many local area network (LAN) switches are interconnected together with optical fiber links. The bit error rate (BER) for optical fiber links is the lowest among the possible options available.

Wireless radio links may experience signal fading and interference that can lead to increased BER. Wires may experience signal degradation due to undesired coupling between signals in separate cables, an occurrence called crosstalk. Optical fiber links are free from interference and crosstalk. The equipment for optical fiber links, however, can be more expensive.

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